Supply Chain Issues Top Rising Prices for Off-Premise Retailers

Adult beverage retailers more concerned about lingering supply chain issues than rising prices and expect online gift giving to tick up this holiday season, according to a survey by Drizly that finds the off-premise shops  stocking (even more) tequila, ready-to-drink (RTD) cocktails, and hard seltzers in 2023, and seeing big potential for craft beer, red wine and celebrity brands.

Some 43% of retailers cited supply chain issues as their biggest concern for 2023, but 63% of those surveyed believe  inflation has affected their sales this year. As a sign of pandemic-formed shopping behaviors' resilience, 73% of respondents reported that shoppers are still willing to pay for the convenience of delivery.

While bubbly may reign supreme among gifts, 59% of retailers anticipate shoppers to opt for less expensive Champagne and other sparkling wines this holiday season. Transactionally, online gifting is expected to grow this year: a higher share of retailers (40%) expect more online gift orders than do not (32%).

Tequila's torrid growth showing no signs of a slowdown. The agave juggernaut should keep rolling: 64% of retailers surveyed are planning more incremental shelf space for tequila than for any other spirit. What's more, 35% of respondents cited craft beer as the top trending category for 2023, and reds finished first among wine segments slated for more shelf space next year.

Seventy-one  percent (71%) of respondents said that RTDs and hard seltzers have permanently changed how and where they stock products. Signaling space for both, even as 63% of retailers expect to carry more RTD inventory next year, 49% said the same for hard seltzers. And as portable, single-serve drinks continue to soar, 61% called out NA beer as the non-alc product they're planning to stock most in 2023.

Notably, 71% of retailers identified customer feedback as the biggest influence on product stocking decisions, besting distributor recommendations. When asked about special attributes that matter most, celebrity ownership climbed into second place this year with 54% of retailers citing star power as a reason to carry a product.

"This year's report shows how remarkably dynamic the beverage alcohol industry is right now in every aspect - from emerging segments and the evolution of online shopping to what influences purchase decision-making," said Cathy Lewenberg, Drizly's Chief Operating Officer. "With insights coming straight from our Retail Partners, who operate on the frontlines with consumers, it gives us an in-depth look into beverage alcohol's near-term future, and perhaps, longer-term outlook."